The periods of widespread panic about the U.S. and global economy seems to have come and passed, and the heightened sense of adrenaline about a widespread economic collapse has passed with it. This has been replaced by a sense of general agreement that a recession is here and will continue inevitably for a good while, leading to a sense of pessimism about prospects for a quick economic recovery. A prolonged sense and foreboding of a lasting recession bodes poorly for lending prospects and the credit market in the near future. Even on some recent days we’ve seen some days of even big gains in the stock market, there has been little evidence of other signs of economic recovery.

Taking a quick look at the mortgage and foreclosure situation, private investors as well as those in the financial sector are quickly adjusting their strategies, toward more caution and safety. At the same time, with the economic downturn, the job situation and employment are looking more and more bleak, with the largest layoff and unemployment numbers we’ve seen in a long long time (533,000 reported lost jobs in November 2008, the largest ever in history for a single month). This will all mean that banks will have less and less equity to loan out, banks will incur even more losses, and the government will have a tough and tougher time attempting to stabilize the fragile economic situation.

Since theres has never been so severe a housing crunch and foreclosure crisis before that is projected to last a good while, it is hard to estimate what will happen next. If we only look at the current regional effects, we can see banks and credit institutions nearly doubling their cash reserves and becoming more and more reluctant to lend out money in fears of not being able to recoup their money. The institutions are also hoarding money in case it needs the cash to cover more losses in the future.

Our words of advice to you in this frigid economic climate: be smart with your money. Now is the best time to make timely and educated investments if you have money to spare. If you do not, focus on living lean, paying all your bills online, building up your credit history, and improving your credit score. When the time comes when you need to get some credit account, all these things will only help you get more approvals and get better terms and rates. In the meantime, for the best credit card offers with different features and reward types, compare Credit Card Offers here. If you need a Free Credit History or Credit Monitoring Service, click on the Credit History Comparison Matrix Tab